Urban consolidation center

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When a broad definition is used, an urban consolidation center (UCC) is best described as a logistics facility that is situated in relatively close proximity to the geographic area that it serves, be that a city center, an entire town or a specific site (e.g. shopping center), from which consolidated deliveries are carried out within that area. A range of other value-added logistics and retail services can also be provided at the urban consolidation center.

Broadly speaking the key purpose identified for UCCs is the avoidance of the need for vehicles to deliver part loads into urban centers or other large developments. This objective can be achieved by providing facilities whereby deliveries can be consolidated for subsequent delivery into the area in an appropriate vehicle with a high level of load utilization.[1]

A broad range of terms is used to refer to the urban consolidation center concept, namely public distribution depot, central goods sorting point, urban transshipment center, shared-user urban transshipment depot, freight platforms, cooperative delivery system, consolidation center (sometimes specific, e.g. retail, construction), urban distribution center, city logistics schemes, logistics center, pick-up drop-off location, and offsite logistics support concept.

Contents

Consolidation activity

Consolidation activities take place at the urban consolidation centers. Long haul transportation vehicles of various modes dock at the UCC to unload their cargo. Loads are then sorted and consolidated into smaller vehicles for distribution. Urban consolidation centers may be stand-alone facilities situated close to the city access or ring highways, or may be part of air, rail, or navigation terminals. UCCs may then be viewed as intermodal platforms or freight villages with enhanced functionality to provide coordinated and efficient freight movements within the urban zone. They are thus an important step toward a better organization of urban freight transportation and are instrumental in most city logistics proposals and projects so far.[1] Of course, a city logistics system would also address the reverse movements, from origins within the city to destinations outside, as well as movements among origins and destinations within the city.[2] Currently, however, only inbound distribution activities are generally addressed, following the imbalance between entering and exiting flows that characterize most cities. To simplify the presentation, we adopt the same perspective.[3]

Examples of urban consolidation centers

One of the best-known implemented consolidation center initiatives is the one in Monaco. The Monaco government initiated it in 1989 in combination with strict truck regulations and the provision of huge subsidies. As a result, the governmental subsidy per delivery did exceed the price customers pay per delivery. Monaco’s typical characteristics add to the initiative’s success, but make the results hardly transferable to other cities. Monaco, in addition to a city is also a sovereign state, which enables the complete insertion of the urban consolidation center concept in Monaco’s global policy. Besides, the government has a comfortable financial position, which makes huge financial support possible.[6]

  • La Rochelle (see[4])

In La Rochelle an UCC was set up in 2001 with a considerable starting subsidy. From the UCC, electric vehicles supply the historical city center of La Rochelle. Some problems occurred in the initiative, i.e. although regulation forbids heavy vehicles to enter, the enforcement is lacking. Next, the capacity of the electric vehicle was limited, resulting in more vehicle trips and an increase in urban congestion. Furthermore, it turned out to be legally not allowed to deny access for non-UCC users, as long as they satisfy the vehicle restrictions and time windows. And finally, no one responded to the tendering for the UCC management.[6]

  • Leiden, The Netherlands (see[7][8])

A comparable initiative failed in Leiden. The urban consolidation center opened in 1997 to improve the quality of life in the historical center of Leiden. Eventually, the number of customers for Leiden’s UCC was by no means sufficient to reach the break-even volume, even after the surrounding cities were added to the working area of the UCC. Parcel delivery companies decided not to join the initiative, basically because they were not willing to collaborate with their competitors. The project stopped in 2000.

  • Schoemaker (2002)[7] mentions some failure factors for the project, i.e.:
    • The UCC was located too far away from the highway and from the city center.
    • The supporting policy measures, i.e. time windows and vehicle restrictions, resulted in opposition against the UCC. These measures were considered to be unfair ways to keep the municipality’s unprofitable UCC alive, instead of making the city more attractive.
    • Reluctance in the transport industry to use the UCC; e.g. already thin margins on transport, for complex goods using the UCC was legally not allowed and insurance companies did not allow valuable goods to be transshipped through the UCC.
    • Electric vehicles slowed down all traffic.
    • More urban consolidation centers were started; companies could start their own UCC if they fulfilled some regulations and as a result received the same advantages as the municipality’s UCC.
    • Financially not feasible due to lack of volume.[6]

After some initial successes, many German cooperation and city distribution center initiatives were terminated after the first phase or even earlier. Browne et al. (2005) found that of the approximately 200 planned or realized schemes in Germany at most five were actually operating in 2005. In search for cooperation and city distribution center initiative’s success factors, Koehler (2004)[9] found two successful initiatives that had a freight traffic center incorporated: Nürnberg city logistics initiative, Isolde, and Regensburg city logistics project, Reglog. These initiatives have the following success factors in common (Koehler, 2004): restricted traffic conditions in the cities, mediator, scientific support in initial phase, integration of a freight traffic center in the initiative, enforcement of regulations by local authorities, early involvement of all actors and collection of waste to utilize vehicles better by including the loads for the return trips to the freight center.[6]

  • Nijmegen, The Netherlands (see [6])

Binnenstadservice.nl (BSS) in Nijmegen distinguishes itself from other UCC initiatives by its focus on receivers rather than on carriers. This concept is a success; in its first year operating already 98 stores join BSS, which results in an increasing volume. The number of stores and the volume is still increasing after BSS decided to continue business after one year, although financially there are still deficits for the second year without local authorities’ subsidies. BSS already shows positive results after its first year of service in Nijmegen. Due to the BSS consolidation center, the number of trucks and also the number of kilometers in the city center decreased. In cases where more stores join BSS, the reduction in truck kilometers will increase significantly. The effects on inconvenience for residents, traffic safety and shopping environment are promising. The effects on local air quality and noise nuisance are limited, due to the amount of remaining passenger and bus traffic and the high natural background concentration of PM10 and NO2.

In Belgium CityDepot is active in Hasselt, Leuven, and Gent. The goal of CityDepot is developing and offering (logistic) services for retailers through a logistic service center located on the edge of town, mainly aiming for a green and bundled delivery of goods and re-enforcing innercity attractiveness (shopping, visiting, living, traffic,), and this within a realistic economic and operational model. CityDepot is similar to Binnenstadservice.nl. In the current situation (March 2013) 75 retailers are on board, and weekly 2 to 4 retailers join.

Success and failure factors

  • Research shows that many urban consolidation centers are only granted a short lifespan. Several reasons can be identified. First of all, because the cost of the additional transshipment often prevents them of being cost-effective. Therefore, they are dependent on governments willing to subsidize them because of their positive impact on congestion, emissions and the shopping climate. In addition, urban retailers do not always see their added value and therefore often opt out as soon they are expected to pay for the service.[11]
  • Carrier-willingness to cooperate in an urban consolidation center is high at the start of an initiative and the fact that deliveries are already efficiently organized from a carrier-perspective is neglected. A problem in practice is that the number of participating carriers is usually far lower than expected, which implies less scale advantages and less bundling possibilities resulting in higher cost per delivery.[6] Ambrosini et al. (2004) and Regan and Golob (2005) estimate that about 20% of the carriers are willing to use a urban consolidation center.[12][13]
  • Many carriers still prefer directly supplying the stores without using the urban consolidation center, even if policy restrictions are in place.[4] [7] Although, local authorities usually aim at offering consolidation centers as a means to deal with restricting policies, carriers perceive the regulations as a way to force them to use this unprofitable center, although it raises their costs. Therefore, it is of importance to clearly communicate the reasons for the restrictions and the consolidation center.
  • Another lesson from the initiatives for authorities is not to be over ambitious; for example in case electric vehicles are used for the final deliveries in the city and these vehicles hinder traffic, social acceptance of the consolidation center that uses these vehicles is probably very low. [7][8]
  • Consolidation centers might not have positive results for all type of deliveries; for example, one FTL delivery for a store in the city center is more efficient than several small vehicles. For example food retail operations are already very efficient. For example a distinction can be made between full truckload (FTL) and less than truckload (LTL) deliveries to prevent the possible undesired side effects of a decrease in efficiency and an increase in the number of vehicles.[14]
  • From a logistical view, the major potential beneficiaries of an UCC are independent and small retailers as well as operators making small multi-drop deliveries in especially areas in which constraints on delivery conditions exists (e.g. restricting regulations or congestion).[1]
  • Urban consolidation centers have the most potential if there is enough external funding, as self-financing UCCs do not occur in practice yet. Another way to compensate for these extra costs might be by offering extra services, e.g. pick-up points for customers or storage facilities.[1]
  • The decision on the location(s) of the UCCs can determine success or failure.[1]
  • Urban consolidation centers seem to be most feasible, if feasible at all, for historical cities that have restrictive and inhibitive conditions for urban freight transportation anyway, next to potential governmental restrictions.[6]
  • Dablanc (2007)[15] notices a higher rate of "success", defined as systems still in existence after certain number of years, for small to medium-sized cities than for large ones. The reason for this is that the controlled zone is relatively small and close to the outskirts of the city where the UCC is located.[3]

See also

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 Browne, M., Sweet, M., Woodburn, A., and Allen, J. (2005). Urban freight consolidation centres: Final report, Technical report, Transport Studies Group, University of Westminster.
  2. Crainic, T. G., Errico, F., Rei, W., Ricciardi, N. (2012) Integrating c2e and c2c traffic into city logistics planning. Procedia - Socail and Behavioral Science 39(0), pp. 47-60.
  3. 3.0 3.1 Crainic, T.G., Ricciardi, N., and Storchi, G. (2009). Models for Evaluating and Planning City Logistics Systems. Transportation Science, Vol. 42, No. 4, pp. 432-454.
  4. 4.0 4.1 4.2 Patier, D. (2006). New concept and organization for the last mile: the French experiments and their results. In E. Taniguchi, & R. G. Thompson (Eds.), Recent advances in city logistics, pp. 361-374, Elsevier, Amsterdam.
  5. Van Binsbergen, A., & Visser, J. (2001). Innovation steps towards efficient goods distribution systems for urban areas. PhD thesis, DUP Science, Delft.
  6. 6.0 6.1 6.2 6.3 6.4 6.5 6.6 Van Rooijen T, Quak H. (2009) Local impacts of new urban consolidation centre – The case of Binnenstadservice.nl. Sixth International Conference on City Logistics, Puerto Vallarta.
  7. 7.0 7.1 7.2 7.3 Schoemaker, J. (2002). Stadsdistributiecentrum Leiden, in D. Egger, & M. Ruesch (Eds.), BESTUFS – Best practice handbook 2002, BESTUFS, 1999-TN.10003.
  8. 8.0 8.1 Van der Poel, W. (2000). Leyden Car(e) Free, an integral approach to a better environment in an old city, Gemeente Leiden, Leiden.
  9. 9.0 9.1 Koehler, U. (2004) New ideas for the city-logistics project in Kassel, in E. Taniguchi, & R. G. Thompson (Eds.), Logistics systems for sustainable cities, pp. 321-332, Elsevier, Amsterdam.
  10. http://www.citydepot.be/
  11. Verlinde, S., Macharis, C., and Witlox, F. (2012). How to conosolidate urban flows of goods without setting up an urban consolidation centre? Procedia - Social and Behavioral Sciences 39, pp. 687-701.
  12. Ambrosini, C., Routhier, J. L., & Toilier, F. (2004) How do urban policies work on urban goods transport flows. WCTR’04, CD-rom, Istanbul, BCI – Buck Consultants International (2005), 0-meting “Vervoersbewegingen Binnenstad Nijmegen”, Buck Consultants International, Nijmegen.
  13. Regan A. C., & Golob, T. F. (2004). Trucking industry demand for urban shared use freight terminals. Transportation, 32(1), pp. 23-36.
  14. Boerkamps, J., & Van Binsbergen, A. (1999). Goodtrip – a new approach for modelling and evaluating urban goods distribution. In E. Taniguchi, & R. G. Thompson (Eds.), City Logistics I, pp. 241-254, Institute of Systems Science Research, Kyoto.
  15. Dablanc, L. (2007) Goods transport in large European cities: Difficult to organize, difficult to modernize. Transportation Res. Part A: Policy Practice 41(3), pp. 280–285.
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